The Indian rice export supply chain is struggling due to the limited availability of containers and scarcity of the labor at the biggest handling port on the east coast after novel COVID-19 cases jumped in the region.
A disturbed supply cycle can imbalance the country’s rice export market, leading to rival countries like Thailand and Vietnam to raise their supplies. It can cause a great shift in global rice prices as well.
One of the well-established ports for rice supply is Kakinada port in Andhra Pradesh, a district in the state where most port labor is located is reporting 1000 virus cases every day in july 2020.
This obstruction is causing a slow inflow and outflow of containers, creating a disparity in the export cycle. As per the president of rice export association, B.V. Krishna Rao- the container loading at Kakinada port has gone down by 30%
In the next few months, if the disturbance in the container movement continues, India’s export is expected to decline by 10,000 tonnes of rice. Supply Chain outside Andhra Pradesh is also affected due to the lesser movement of containers.
However, the demand for India rice is great, as it’s cheaper, if the exporters can create a seamless supply chain chances are the rice business can boom back in no time.
With the preceding evaluation, another overlooked reason for supply chain obstruction is that all the exporters are following the same logistics solutions for decades. In the current system, all the exporters have preferred freight agents who have limited contacts with the shipping giants. Due to these limited contacts, agents can only provide limited container options. To revamp and restart the rice exports again the exporting system needs to be elevated.
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